Cashing In On the Clean-Up

After being swamped with snow just a few weeks ago, the Northeast is gearing up for another wild ride. The storm, dubbed the “Snowicane,” is expected to cause powerful winds, immobilizing snow, whiteouts, horizontal rain and flooding. Not only does this kind of extreme weather cause hazardous driving conditions, it also cost millions of dollars in snow removal costs and other damages.

In New York, for example, it costs the city an estimated $1 million per inch to plow the snow. And Planalytics, a Pennsylvania based firm that specializes in business-related weather forecasting, estimates the wintry messes in February topped $100 million a day during the worst weather when you add up overtime expenses, reduced productivity and lost sales.

But while some companies are flaking out when it snows, five stocks in particular are poised to cash in big-time because of this winter’s extreme weather.

As one of North America’s largest roofing materials distributors, Beacon Roofing Supply (BECN) operates 175 branches throughout the U.S. and Canada. Besides roofing products, the company also manufactures related materials, such as siding, windows and waterproofing systems — products that are sure to be in high demand after the current round of winter weather.

In its fiscal first-quarter earnings report released in February, BECN did show signs of tough times with a 20% decline in sales year-over-year. However, residential roofing sales were up against strong comparisons to the previous year where Hurricane Ike literally drove sales through the roof in Texas. This shows how weather patterns can affect Beacon Roofing’s results, so the stock should cash in after the storms of February.

Home Depot (HD) has about 2,300 retail stores in the U.S., and is likely to be the first destination for homeowners looking to fix burst pipes, mend fallen gutters or tend to other havoc inflicted by Old Man Winter.

HD made a splash recently with a fantastic Q4 earnings report. A 1.2% jump in same-store sales for the period helped the company trounce Wall Street estimates of 17 cents per share with actual profits of 24 cents per share. Do-it-yourself repairs in the wake of the winter storms are sure to pad Home Depot’s bottom line for the current quarter.

Watsco (WSO) distributes heating and air conditioning parts through its some 400 U.S. locations that serve about 40,000 contractors and dealers. As winter takes its toll on copper tubing to external heating units, ductwork and thermostats, WSO has the perfect product for any repair.

WSO posted a stunning 75% earnings surprise in the latest quarter, thanks in large part to a joint venture formed last year with United Technologies Corp.’s (UTX) Carrier brand. This 60% stake has allowed Watsco an even greater scale, and that should come in handy as homeowners focus on HVAC systems right now.

Ford (F) may not sound like a winter-weather stock, but the company makes internal combustion engines for far more than just Mustangs and F-150s. The fact is that Ford remains one of the largest engine suppliers for top privately held generator companies like Generac and Kohler.

Ford is a great stock to buy right now for a number of reasons — it’s gobbling up market share from bankrupt GM and Chrysler and is benefiting from uncertainty over Toyota (TM) vehicles in the wake of the recent recalls. The generator angle provides just one more reason to like Ford stock right now.

Compass Minerals (CMP) is a leading chemical company that specializes in fertilizers and salts. While it’s clearly not time to be watering the garden, Kansas-based CMP is seeing brisk business from its deicing and salt products thanks to the wintry weather.

Compass has grown its earnings per share dramatically across the last few quarters and is looking to share more of those profits with shareholders. On Feb. 8, CMP raised its quarterly dividend by 10% 39 cents per share, payable March 15 to shareholders of record as of March 1. This stock is going strong right now and should see continued success from the winter weather.

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